On 7 February, the President asked the Court of Appeals to review the legality and constitutionality of this law, which is a 98% increase over the original 2010 State Budget. We have translated and posted the President's request and the Court's letter to Parliament on our website, which also links to Portuguese originals and other relevant documents. The Court must decide by 17 February; we hope it will wisely advise the President to return the Budget Law to Government and Parliament for redrafting.
The main points in La'o Hamutuk's letter are:
- Unsustainable spending threatens the goals of the Petroleum Fund Law.
- The Infrastructure Fund is a bad precedent.
Capital Development Fund. The Government says it is establishing these Special Funds
according to the 2009 Budget and Financial Management Law, but this interpretation of that law undercuts the Constitutional powers of Parliament "To deliberate on the State Plan and Budget and the execution report thereof" and "To monitor the execution of the State budget.” We also believe it is too soon to allocate funding to execute the National Strategic Development Plan (PEDN), which Parliament has never seen.
- The Heavy Oil Electricity Project could be a black hole.
- The oil price predictions are not prudent.
- Please exorcise the “Resource Curse.”
Therefore, we believe that you, as “the Head of State and the symbol and guarantor of national independence and unity of the State and of the smooth functioning of democratic institutions,” as described in our Constitution, should use your powers to rescue our State from economic instability and future poverty, as financial insecurity also threatens our national independence and unity.
- Is creating the Special Funds via the Budget Law, rather than with a separate specific law, permissible under Constitution Article 145.2?
- Does creating the Special Funds without specifying detailed expenditures to be paid from these funds violate the transparency requirement specified in Constitution Article 145.2?
- Does transferring $321 million more than the Estimated Sustainable Income without a detailed explanation of why this is in the long-term interests of Timor-Leste violate Article 9 of the Petroleum Fund Law, which has superior force?
On the evening of 11 February, the Court of Appeals issued a 55-page opinion (also Portuguese). After soliciting and summarizing the views of President Jose Ramos-Horta, National Parliament President Fernando LaSama Araujo and Prosecutor-General Ana Pessoa Pinto, the three judges Claudio de Jesus Ximenes, José Luís da Goia and José Manuel Barata Penha cited extensive scholarly research and previous cases, concluding
The President promulgated the budget the following day, before leaving for a week in Israel and Palestine. La'o Hamutuk believes that even if the budget is legal and constitutional, that doesn't make it good policy."For these reasons, the judges of the Court of Appeal have deliberated that the Decree of the National Parliament No 45/II approving the 2011 State budget submitted to the President of the Republic does not violate Articles 145.2 and 115 of the Constitution, nor Article 9 of Law 9/2005 of 3 August (on the Petroleum Fund)."